What is the ruling on a man committing adultery with his niece, and how should the family deal with him?

The sodomy that is forbidden by Islamic law is that which occurs between a man and a man. As for what is mentioned in the question, it is fornication/adultery (zina), which is forbidden and abhorrent. Its reprehensibility increases if it occurs between المحارم (unmarriageable kin). This man should be advised, and it should be made clear to him that what he is doing is a major sin. This girl should be kept away from him, and he should not be allowed to be alone with her or with any other female. Efforts should be made to marry him off if he is not already married, and negative influences should be removed from him. He should also be treated harshly and ostracized until he repents. If that does not work, official authorities can be notified to imprison him, because his continued presence poses a danger to the family.