I would say that three feet absolute minimum, plus if things are hung or stacked so that they could fall and contact the water heater, they are too close. This would be for electric heaters, I would go a foot or two more for gas heaters.

Heat and flame are the two considerations…IF it is gas fired then the flame is of major concern and you should insure that nothing is closer than 3 ft away for the unit….If it is an electric water heater then be sure to remain no closer thatn 2 ft away form the unit…..Additionally if it is a gaws fired water ehater you may have an oxygen dprivation sensor on the unit ( newer all have this feature) and if the unit sense not enough oxygen getting to the burner it will shut itslef down…So be sure not to pack it too clsie and leave a lot of room for air to move freely about in order to support combustion. The same rules for an oil fired unit will apply as the gas unit

what kind of stuff are you storing? Flamables is a no no. But they always should be. I think that it is like you should have a clearance of at least 2 feet on each side and nothing on top.