A lighthouse can actually be made into suitable living quarters. It wouldn't be the best living situation, but at least it would offer the bare essentials as per its original purpose. A simple water tower, on the other hand, is emptied for a reason. I wouldn't trust it to be up to code, to even be possible to be up to code, therefore not only would I believe it is unsuitable as a dwelling, but also potentially dangerous to even try making it into one.