There are many possibilities to sleep during the Encuentro. The Art Mill offers a few rooms (single, double, family and even a Bridal Suite), next to a dormitory with double beds and single beds. When you are accepted to the Encuentro you may contact the organizer, Guilherne Crain.
If these beds should all be taken, there are many rooms for rent in the surrounding area. A few addresses you can find on the site of the Artmill, but for sure there are many more.