How to handle software buttons taking up screen space?

The menu I am developing for my android app scales to fit the screen based on resolution. I am having a problem with the Nexus 7 where the UI scales to be too wide in portrait resolution, which is am guessing is based on the change in aspect ratio due to the software buttons at the bottom of the screen.

How can I work around this?

 

You have to either scale and/or move your objects to match the aspect ratios. With Android there are so many aspect ratios, so this requires some planning during the designing.