Do You Still Recommend Creating Subdomains Versus Subdirectories For Rank And Rent Multi-City Websites?

In episode 209 of Semantic Mastery's weekly Hump Day Hangouts, one participant asked if the team still recommends creating subdomains versus subdirectories for rank and rent multi-city websites.

The exact question was:

I'm embarking on building multi-city websites for rent. Do you still advocate creating subdomains versus subdirectories like domain.com/city for each city? And is the choice weighted more towards safety (penalty) or ranking? Thanks!