Hm, the more I play Civ 6 the more I settle with no water access. On purpose. Reason? A pop 4 city can have 2 districts. And it won't be unhappy (well, not very much at least). If it's pop 3 it definitely won't be unhappy, but then it can only have one district (commercial usually). I think having 3 crap cities is much better than 2 medium sized ones. They pick up resources and territory much better than 1 big city, and you don't have to spend gold on buying tiles, etc.
So my answer to OP question would be: How to develop water starved cities? Found 2 more water starved cities 4 tiles away. That makes 6 districts in 3 pop 4 cities. + adjaceny bonus, if you found them close enough to each other. You'd need a size 16 city to get those 6 districs.
If it's the capital however ... Well, then I would found a 2nd city at a river location asap.