One of the hardest things to get one's head around in Civ 6, if you've played other versions of civ, is that you don't need to grow your population in Civ 6. Therefore, anything that provides housing and only housing is of little to no benefit in terms of winning.
A city with no water is just fine. That doesn't impact the productivity of it's districts and buildings in the least.
Of course, you may well want to grow your cities as big as possible, as that's always been something one wanted to do in past versions of civ and it seems sort of wrong to not keep doing it. If you're having fun and enjoying whatever level you're playing, great. If you're finding it difficult to beat the AI, though, one hint is to not invest in population growth (no using Builder charges for farms, etc.)