pip install mkdocs-same-dir
Activate the plugin in mkdocs.yml, along with actually changing
(normally, MkDocs absolutely wouldn't let you set it to
site_name: foo docs_dir: . site_dir: ../site plugins: - search - same-dir
and now you can move this mkdocs.yml into your docs directory, or move your docs alongside mkdocs.yml.
Another necessary effect of this plugin is that files directly at the root of the docs dir will no longer be picked up, unless they are Markdown files.
And note that the implementation of this plugin is a huge hack that monkeypatches MkDocs' internals. But I pledge to keep up with MkDocs updates and keep it working as long as that's still possible.