Solidity – Why Local Variables are Allocated to Storage Instead of Memory

The Solidity FAQ on "memory" is highly recommended reading in entirety, and a snippet is provided below.

The Ethereum Virtual Machine has three areas where it can store items.

The first is “storage”, where all the contract state variables reside. Every contract has its own storage and it is persistent between function calls and quite expensive to use.

The second is “memory”, this is used to hold temporary values. It is erased between (external) function calls and is cheaper to use.

The third one is the stack, which is used to hold small local variables. It is almost free to use, but can only hold a limited amount of values.

For almost all types, you cannot specify where they should be stored, because they are copied everytime they are used.

The types where the so-called storage location is important are structs and arrays. If you e.g. pass such variables in function calls, their data is not copied if it can stay in memory or stay in storage. This means that you can modify their content in the called function and these modifications will still be visible in the caller.

There are defaults for the storage location depending on which type of variable it concerns (source):

state variables are always in storage
function arguments are always in memory
local variables of struct, array or mapping type reference storage by default
local variables of value type (i.e. neither array, nor struct nor mapping) are stored in the stack

The FAQ has code samples to help explain further.

A common mistake is to declare a local variable (of struct, array or mapping) and assume that it will be created in memory, although it will be created in storage.

The subtleties explanation of memory explains gas costs for using memory, which is a byte-array that "starts off zero-size, but can be expanded in 32-byte chunks by simply accessing or storing memory at indices greater than its current size".

Because is not creating a new object but is a storage pointer. _getAuctionByTokenId most probably would read something in the contract storage.

Assume this example

contract MyContract {
    struct myStruct {
        address id;
    }
    mapping(address => myStruct) myMapping;

    function doSomeStuff(address _tokenId) public view returns(address) {    
        myStruct storage myObj = myMapping[_tokenId];

        return myObj.id;
    }   
}

myObj is not a new object but a pointer to a storage location already stored inside my contract. If I remove the storage keyword I would get the following warning:

Warning: Variable is declared as a storage pointer. Use an explicit "storage" keyword to silence this warning.