Should I give them a gift card or something similar as a small gesture of appreciation and holiday spirit?

That way you free up income and don't have to report these friendly gestures.

Obviously a really nice gesture. 

My father-in-law did it with his rentals, thinking his tenants would appreciate the gesture and return the favor by being good tenants.

This thoughtful gesture will go a long way in this business.

We've had people send us chocolate-covered cherries, popcorn, cookies, and more, and while we love that gesture, most of us are on a diet and it ultimately goes to waste, ha!

The tenant will know the downside so no need to share that but there is a risk that a quality candidate might bolt if this is viewed as an unearned punitive gesture or threat.  

They may gripe that they're losing some territory, but you can talk to them, explain that as a charitable gesture you've dedcided to forgo this years rent increase....You may check with your building deprtment before you knock out, they may require that new construction must look like and resemble the existing houses.

It seems like a very nice gesture but it may blur the line between landlord and tenant.

What I need: qualities, courtesies, gestures you appreciate in your dream contractor so I can include them in my SOP's (standard operating procedures) to be distributed to our employees.Thanks!