Density functional theory methods are applied to investigate the properties of the new superconductor $beta$-YbAlB$_4$ and its polymorph $alpha$-YbAlB$_4$. We utilize the generalized gradient approximation + Hubbard U (GGA+U) approach with spin-orbit(SO) coupling to approximate the effects of the strong correlations due to the open $4f$ shell of Yb. We examine closely the differences in crystal bonding and symmetry of $beta$-YbAlB$_4$ and $alpha$-YbAlB$_4$. The in-plane bonding structure amongst the dominant itinerant electrons in the boron sheets is shown to differ significantly. Our calculations indicate that, in both polymorphs, the localized 4$f$ electrons hybridize strongly with the conduction sea when compared to the related materials YbRh$_{2}$Si$_{2}$ and YbB$_{2}$. Comparing $beta$-YbAlB$_4$ to the electronic structure of related crystal structures indicates a key role of the 7-member boron coordination of the Yb ion in $beta$-YbAlB$_4$ in producing its enhanced Kondo scale and superconductivity. The Kondo scale is shown to depend strongly on the angle between the B neighbors and the Yb ion, relative to the $x-y$ plane, which relates some of the physical behavior to structural characteristics.