UHCC said if buildings fall into disrepair, "public health and safety is undermined and offensive behaviour can increase".
Councillor and Featherston Business Association chairman Colin Olds said he thought it was a great idea.
"I think if the bylaw was adopted we could see a vast improvement in some of our towns, particularly Featherston."
He said one "absentee" landlord had left a number of buildings to decay.
"I'd love to see something like this that penalises absentee landlords that don't take care of their properties."
The legality of the bylaw was still to be investigated, however, said Mr Olds.
"Providing it stacks up, it could be a valuable tool."
In a report to the council, Murray Buchanan, group manager planning and environment, said the bylaw had to be proven legal and effective.
After discussing it with the Upper Hutt council, he found some risks if challenged legally.
"The informal advice from their solicitor is if they use it they may be faced with costs."
It was difficult to know its legal basis because of different rules in the Building, Resource Management and Local Government Acts, he said.
"The focus is on the private property owner's rights rather than the public's view."
John Broeren, who owns "a few" empty buildings, some historic like the Sunlea building, in Featherston, said he had been expecting a bylaw like this.
He said he had been restoring his properties but they were constantly being vandalised. In one year, he had $10,000 worth of windows broken, so instead of putting new glass in, he used plywood to board it up.
Featherston needs much more than attractive buildings, said Mr Broeren.
"It [the bylaw] would be used to make it look like towns are prospering when they aren't," he said.
"It's not going to make a difference.
"The council should be putting their money and energy into promoting the town and not punishing those who took the chance and invested in it when no one else was interested."
Mr Broeren said there was potential for industrial businesses to set up in the town and a rates discount would encourage this.
It was a bit of a chicken and egg scenario, he said.
"They need industry, then jobs, then things will happen."
He also said there was also more demand from people to buy than lease in Wairarapa.
"If you've got tenants wanting property, then naturally they lease it."
Frank Cornelissen, chairman of Martinborough Business Association, said he understood the dilemma some affected landlords faced.
"At the end of the day if they are struggling to rent it out, they will stop putting money back into it." He said anything that encouraged businesses to open up in the area was good.
"As a landlord you'd want your building to be tenantable.
"I think that everyone would make it as easy as possible for people to come in and set up," Mr Cornelissen said.
"But I'd be careful about a bylaw that enforces taste."
If the bylaw is legally sound, a full report will be given to council for consideration.