A “medallion” is effectively permit that is issued by the local government with only a fixed number being available. For example, the city might decide that want to limit the number of short-term rental properties within the city limits to 5000, so they create 5000 permits and sell them to hosts that want to start renting. Once the 5000 permits are sold, the city won’t issue a new one until the city council agrees to increase the number of short term rental properties within the city. The only way for a new host to get a permit is if some other host stops renting a property and gives up the associated permit. If the permit is not transferable, then the host with the permit forfeits the permit to the city and the city will re-issue the permit to the next person on the waiting list (this is what @CeeBee’s local government must be doing). If the permit is transferable (which it the way I understand taxi Medallions work), then the host with the permit can sell it to whomever she chooses, which creates a supply-and-demand market for the permits.
5 Likes