Meet with the counselor and ask her to address it in her cover letter. If there is still a Covid impact essay space available, state the facts of the matter there in a non-creative, stark manner. “My parents lost their jobs at the beginning of the pandemic. We had to move out of our home, into a hotel room. The four of us all lived out of a single hotel room for the first semester of my freshman year. I had difficulty finding a private or quiet space to do schoolwork. In addition, I was sick with Covid twice during my freshman year.”
When there is true adversity, you don’t want to joke about it, embellish it, or write creatively about it. The plain facts are striking enough.