ProFTPd chdir permission denied issue

This should be dead simple but I can't figure it out.

I have a web app (Magento) in

/srv/www/magento.com/public_html

The filesystem permissions are standard Magento permissions http://devdocs.magento.com/guides/m1x/install/installer-privileges_after.html

The files are owned by www-data:www-data

I've installed ProFTPd and when I create a normal user (e.g. user1) I can login and create/delete files no problem to /home/user1

I tried setting the users home directory:

usermod -m -d /srv/www/magento.com/public_html user1

I also added user1 to the www-data group

usermod -g www-data user1

Yet despite all the above ProFTPd can't switch to that directory

proftpd[20413] myserver: user1 chdir("/srv/www/magento.com/public_html"): Permission denied

I can't switch the file ownership to be owned by user1 as nginx/php5-fpm need them to be under www-data

I'm guessing I'm missing some other basic ubuntu file permissions issue.

Any ideas?

Here's my proftpd.conf file

#
# /etc/proftpd/proftpd.conf -- This is a basic ProFTPD configuration file.
# To really apply changes, reload proftpd after modifications, if
# it runs in daemon mode. It is not required in inetd/xinetd mode.
#

# Includes DSO modules
Include /etc/proftpd/modules.conf

# Set off to disable IPv6 support which is annoying on IPv4 only boxes.
UseIPv6                         on
# If set on you can experience a longer connection delay in many cases.
IdentLookups                    off

ServerName                      "XX.XX.XXX.XX"
ServerType                      standalone
DeferWelcome                    off

MultilineRFC2228                on
DefaultServer                   on
ShowSymlinks                    on

TimeoutNoTransfer               600
TimeoutStalled                  600
TimeoutIdle                     1200

DisplayLogin                    welcome.msg
DisplayChdir                    .message true
ListOptions                     "-l"

DenyFilter                      \*.*/

# Use this to jail all users in their homes
#DefaultRoot                    ~

# Users require a valid shell listed in /etc/shells to login.
# Use this directive to release that constrain.
RequireValidShell               off

# Port 21 is the standard FTP port.
Port                            21

# In some cases you have to specify passive ports range to by-pass
# firewall limitations. Ephemeral ports can be used for that, but
# feel free to use a more narrow range.
# PassivePorts                  49152 65534

# If your host was NATted, this option is useful in order to
# allow passive tranfers to work. You have to use your public
# address and opening the passive ports used on your firewall as well.
# MasqueradeAddress             1.2.3.4

# This is useful for masquerading address with dynamic IPs:
# refresh any configured MasqueradeAddress directives every 8 hours
<IfModule mod_dynmasq.c>
# DynMasqRefresh 28800
</IfModule>

# To prevent DoS attacks, set the maximum number of child processes
# to 30.  If you need to allow more than 30 concurrent connections
# at once, simply increase this value.  Note that this ONLY works
# in standalone mode, in inetd mode you should use an inetd server
# that allows you to limit maximum number of processes per service
# (such as xinetd)
MaxInstances                    30

# Set the user and group that the server normally runs at.
User                            proftpd
Group                           nogroup

# Umask 022 is a good standard umask to prevent new files and dirs
# (second parm) from being group and world writable.
Umask                           022  022
# Normally, we want files to be overwriteable.

AllowOverwrite                  on

# Uncomment this if you are using NIS or LDAP via NSS to retrieve passwords:
# PersistentPasswd              off

# This is required to use both PAM-based authentication and local passwords
# AuthOrder                     mod_auth_pam.c* mod_auth_unix.c

# Be warned: use of this directive impacts CPU average load!
# Uncomment this if you like to see progress and transfer rate with ftpwho
# in downloads. That is not needed for uploads rates.
#
# UseSendFile                   off

TransferLog /var/log/proftpd/xferlog
SystemLog   /var/log/proftpd/proftpd.log

<IfModule mod_quotatab.c>
QuotaEngine off
</IfModule>

<IfModule mod_ratio.c>
Ratios off
</IfModule>


# Delay engine reduces impact of the so-called Timing Attack described in
# http://www.securityfocus.com/bid/11430/discuss
# It is on by default.
<IfModule mod_delay.c>
DelayEngine on
</IfModule>

<IfModule mod_ctrls.c>
ControlsEngine        off
ControlsMaxClients    2
ControlsLog           /var/log/proftpd/controls.log
ControlsInterval      5
ControlsSocket        /var/run/proftpd/proftpd.sock
</IfModule>

<IfModule mod_ctrls_admin.c>
AdminControlsEngine off
</IfModule>

# Include other custom configuration files
Include /etc/proftpd/conf.d/

<IfModule mod_cap.c>
   CapabilitiesEngine on
   CapabilitiesSet +CAP_CHOWN
</IfModule>
<Directory /srv/www/magento.com/public_html>
   UserOwner www-data
   GroupOwner www-data
   Umask 002 003
</Directory>