During the 1960; s, one factor that enabled mentally ill persons to move from large institutions to community settings was

The development of medications to treat a number of the disorders suffered by the mentally ill.
Anti-psychotic medications were introduced in the late 1950s and gained wider use in the 1960s.  This allowed for the treatment of symptoms such as hallucinations and other psychoses.  

Another factor was the MentalRetardation Facilities and Community Mental Health Centers Construction Act, passed by Congress in 1963 and signed into law by President John F. Kennedy.  The act emphasized deinstitutionalization, providing funding for community health centers and initiatives to help people stay in their communities rather than being committed to asylums for mental health problems.