That would create quite a continual ruckus, I think. Unless the animals all go inside for the night, the dogs would bark at every animal turning or repositioning or getting up for a drink. The barking would set off a cacaphony of 4esponses from suddenly-awakened and startled animals, which would further set the dogs off in a vicious cycle. Now, this certainly might be effective in deterring vandals and thieves.....
Most 19th Century zoos would have had housing for more senior staff, at least. It was just how things were done then. In Australia that practice has largely disappeared due to Fringe Benefits Tax and the fact that it is much easier to commute distances these days. However Melbourne Zoo at least maintain an on-property house for the Director, the last Director certainly lived in it, I am unsure about the present one. Most private zoo (ie not owned by government or corporations) owners would live on their zoos still, however.
There is a house on the Outer Circle, within the zoo grounds, near the Prince Albert Gate, the garden-gate of which calls the house 'Keeper's Lodge'. It appears to be occupied, with amusing plastic flamingos in the garden!
Mentioning tax, that would apply to such benefits here too. Right out of college, I taught at an elite high school, and I was given free room and board. In 1986, the IRS decided that the room and board were just ways to call "income" by another name and indeed started to tax these benefits. Even in the for-profit world, a local CEO rents my basement apartment for the few days when he comes in from his home on the west coast. He pays me and then submits the rental car and rent as expenses to be reimbursed; if the company were to give him the yearly rent, he'd lose a portion of that on tax. In 1986, schools tried to object that staff was necessary in dorms for security reasons, so it wasn't an "extra perk" like my tenant's would be. It would seem even more necessary to have some staff on hand in case of an emergency with a huge population of animals, but schools lost their appeal. I would guess rulings would be similar for permanent Lodgers in zoos. Come to think of it, that's right around the time the house behind Bronx's Reptile House stopped being used. The occupant and his family probably said something like, "this hole isn't worth living in for free--and now they expect me to pay income tax on its value?!". It's been a maintenance yard ever since
The old director’s house at the National Zoo of South Africa in Pretoria is now used to house visiting researchers for the onsite laboratories and other visiting industry professionals. I lived there for nearly three months during my stint in the country. I also lived onsite in a renovated staff building at my current place of work until I was able to find and move into my own apartment.