The gemara says that one of the things that we learn out from the pasuk of לא תחנם is that one cannot offer goyim free gifts. Tosafos qualifies this based on the opinion of R. Yehuda himself in Pesachim who says that one can send a gift to a goy, that it is only prohibited if you don't know him. A goy that is a friend or neighbor can be given a gift because he will "owe" appreciation and do something in return so that every gift is essentially a sale. Tosafos then asks how can the mishna in gittin permit supporting goyim who are poor, it should be prohibited since the donor receives nothing in return. Tosafos explains that since it was instituted for the purpose of darkei shalom - maintaining peace, it is not considered a "free gift". Tosafos understands that darkei shalom is not only the reason to require it, it is also the rationale to permit it.
Being that in the context of a free gift לא תחנם doesn't prohibit gifts for the benefit of the Yisroel, the same should apply to the other aspect of לא תחנם, not giving them a place to live in Eretz Yisroel. Therefore, if a Jew is going to sell land in E.Y. for his own personal gain i.e. during the shemita year to exempt the land from kedushas shevi'is, it shouldn't violate לא תחנם. However, the Chazon Ish (Shevi'is 24:4) writes that this is not true. Although the aspect of free gift is permitted for the benefit of the Jew, that is because it no longer qualifies as a FREE gift and doesn't fit the definition of the prohibition. But, it would be forbidden to give them a place in the land of E.Y. even for the benefit of the Jew.
The Ran (end of perek 6b in Ri"f pages, end of mishna) cites a Yerushalmi that allows a Jew to rent land to a goy when there is no Yisroel interested in renting. Although there is a gezeira not o rent land in E.Y. to a goy because you may come to sell, it seems that since it is done for the benefit of the Jew it is permitted. This would contradict the Chazon Ish? The answer is fairly obvious. The Torah prohibition to sell would surely apply even if done for the benefit of the Jew, but the Rabbinic gezeira against renting to goyim was never meant to apply when there is significant loss to the Jew.
On another note - there is a halacha that comes from Tosafos d.h. v'rebi meir, that is worthy of mentioning and being aware of. Tosafos holds that the obligation to give to a ger toshav before selling to a goy, should technically require every Jew to give to his fellow Jew before selling to a goy. Tosafos explains that it only applies to situations where the value to the Jew is very low, and to the receiver would be significant, but a person is not required to suffer a significant loss by gifting an item that he can sell. Based on this, if follows that if for example one has an option of hiring a Jew (or sell to a Jew) at a slightly higher cost than goy, he would be required to suffer a minor loss to hire or sell to the Jew.