Oakland (CA, SF East Bay) has a number of people who live below dams (Lake Temescal and Lake Chabot, on or near the Hayward Fault, respectively), but some say the damage (e.g. in the event of a major earthquake) would be limited. Both are earthen dams.
I’m in Bakersfield, below Lake Isabella, which is earthen and not many years ago, was found to have problems. They keep at at a reduced level.
There is potential for soil liquification during earthquakes. I wonder would would happen to the resisting force of liquefied soil in an earthen dam.