Enable userdir Apache module on Ubuntu

First activate the module:

sudo a2enmod userdir

now edit the module's conf file:

sudo vi /etc/apache2/mods-enabled/userdir.conf

and change the line:

AllowOverride FileInfo AuthConfig Limit Indexes

to

AllowOverride All

By default  PHP is explicitly turned off in user directories, to enable it edit the php module conf file:

sudo vi /etc/apache2/mods-enabled/php5.conf

and comment out the following lines:

#<IfModule mod_userdir.c>
#    <Directory /home/*/public_html>
#   php_admin_flag engine Off
#    </Directory>
#</IfModule>

Now just restart your apache srerver and that's it:

sudo service apache2 restart

You can now create a public_html folder on every users homes with the following script:

#!/bin/bash
for I in /home/*; do
 if [ ! -d $I/$FOLDER ]; then
mkdir -p $I/$FOLDER
U=$(basename $I)
chown $U $I/$FOLDER
chgrp $U $I/$FOLDER
 fi
done # for

Now if you whant to go further and create dynamic vhost for each of your users you can change your default virtual host with something like this:

<VirtualHost *:80>
    RewriteEngine on
    RewriteMap lowercase int:tolower
    # allow CGIs to work
    RewriteCond %{REQUEST_URI} !^/cgi-bin/
    # check the hostname is right so that the RewriteRule works
    RewriteCond ${lowercase:%{SERVER_NAME}} ^[a-z-]+\.example\.com$
    # concatenate the virtual host name onto the start of the URI
    # the [C] means do the next rewrite on the result of this one
    RewriteRule ^(.+) ${lowercase:%{SERVER_NAME}}$1 [C]
    # now create the real file name
    RewriteRule ^([a-z-]+)\.example\.com/(.*) /home/$1/public_html/$2
    <Location / >
        Order allow,deny
        allow from all
    </Location>
    DocumentRoot /var/www/
    <Directory />
        Options FollowSymLinks
        AllowOverride None
    </Directory>
    <Directory /var/www/>
        Options Indexes FollowSymLinks MultiViews
        AllowOverride None
        Order allow,deny
        allow from all
    </Directory>
       # define the global CGI directory
    ScriptAlias /cgi-bin/ /usr/lib/cgi-bin/
    <Directory "/usr/lib/cgi-bin">
        AllowOverride None
        Options +ExecCGI -MultiViews +SymLinksIfOwnerMatch
        Order allow,deny
        Allow from all
    </Directory>
</VirtualHost>

This will allow you to use user.example.com to access your user's pages.